The yield on French 10-year treasury bonds climbed to 3.6%, continuing last week's gains and hitting the highest level since November 2011. The ECB's hawkish stance and concerns about France's public finances weighed on market sentiment. The ECB kept interest rates unchanged for the fourth time in a row last week, and hinted that borrowing costs may remain at current levels for some time, while pointing out that the Eurozone has withstood the impact of US tariffs and performed better than expected. Meanwhile, the Bank of France raised its GDP growth forecast, which is expected to grow 0.9% in 2025 and 1.0% in 2026, while maintaining moderate inflation expectations. At the fiscal level, lawmakers failed to approve the 2026 budget at a joint committee meeting on Friday, forcing the government to seek emergency legislation to extend the 2025 budget. Prime Minister Sébastien Le Corney expressed regret that Parliament was unable to vote on the budget before December 31.

The yield on French 10-year treasury bonds climbed to 3.6%, continuing last week's gains and hitting the highest level since November 2011. The ECB's hawkish stance and concerns about France's public finances weighed on market sentiment. The ECB kept interest rates unchanged for the fourth time in a row last week, and hinted that borrowing costs may remain at current levels for some time, while pointing out that the Eurozone has withstood the impact of US tariffs and performed better than expected. Meanwhile, the Bank of France raised its GDP growth forecast, which is expected to grow 0.9% in 2025 and 1.0% in 2026, while maintaining moderate inflation expectations. At the fiscal level, lawmakers failed to approve the 2026 budget at a joint committee meeting on Friday, forcing the government to seek emergency legislation to extend the 2025 budget. Prime Minister Sébastien Le Corney expressed regret that Parliament was unable to vote on the budget before December 31.